Choppy Realty..!!

The financial crisis in USA is a very sad story of how the management handled the entire operations. But nevertheless, its a good learning experience for the Indian finance institutions considering the skyrocketing price of the property rates.
It seems like we are very much on the same track as the US - the only difference being that the Indian people pay up the home loan money. Else, the banks dont waste time in sending the goons across to beat you up and torture you or your family :P
But, the property rates are still increasing, the interest rates are increasing, this eventually increases the prices of goods, the food, the daily essentials of life. This has a spiralling effect on the inflation index.And then the RBI increases the rate of interest for home loans to curb the inflation.
Lately, the government passed a rule to sell new projects only on carpet area, which is of very little use to anyone 'cos the builders only increase the selling rate of the property. For example: for a 1000sq feet house if the rate was 8000rs per sq feet - you would pay up 80Lacs (without the stamp duty and registration). After the rule has been passed, a new buyer will still pay 80lacs 'cos the price has now increased to approximately 11K per sq feet for a 700sq feet house (carpet area - considering 30% is utulised for the built up space). And this is a fact because why would the builders want to compromise on the money earned.

Now that the financial crisis has hit the US markets badly and with the FII (Foreign Instituional Investors) pulling as much money possible back from the Indian markets. Its really scary as to what is in store for the Indian economy considering that people has suffered heavy losses in the share market - but the property prices are still the same. Yes, they are stagnant, not increasing but defintely not decreasing.

I am wondering what the investors are holding on to and why. The property market has gone down but no one wants to bring down the prices. Infact, I can still see new projects coming up with the same crazy rates and the builders asking to pay some amounts in black and the rest in white.

so many projects have taken a hit, but still the project managers are hoping and waiting for a miracle to happen and the property prices to soar more.
Infact, I am waiting for the prices to go down atleast by a couple of 1000 so that I can buy a decent place for me and my family to stay.

Cheers..!!